Don’t be conned into wiring money from the trust account to scammers
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Email scams are a constant problem, and attorneys are not immune from the risk of being conned. Some of the biggest law firms in the country have been suckered into writing trust account checks or wiring money to bank accounts based on funds they thought had cleared their trust accounts, only to later learn that the check deposited with the law firm was a forgery. The result is that the law firm is on the hook for hundreds of thousands of dollars, while the recipient of the money has disappeared.
For those attorneys who have not yet been hit with the scam, or perhaps are in the process of being scammed right now, here are the basics of how the lawyer version of the “Nigerian Scam” works:
Steps in the Scam
1. Initial contact.
The attorney receives an email from someone who claims to be working in another country who needs help with a legal problem. The emails usually say “in your jurisdiction” rather than specifying the state where the legal issue is based.
2. The Legal Problem.
The sender of the email needs help collecting on a judgment, a contract, or a divorce settlement agreement (usually called a “Collaborative Law Participation Agreement” in the emails, though some seem to have dropped that term).
3. Bad Grammar.
Note that the email usually contains grammatical errors, though not always.
4. Easy work.
The debt is described as being easy to collect by simply sending a demand letter. In some cases, the email sender says the debtor has already agreed to pay, and the lawyer’s job is simply to serve as the intermediary for the transaction.
As predicted by the client, the opposing party quickly pays the money owed with a corporate check. The check is made out to the lawyer, to be deposited into trust. The lawyer will then take his own fees from the trust account transaction, and pay the balance to the client.
6. Client is desperate to meet a deadline.
Due to a pressing demand such as a medical emergency or a property closingdeadline, the client pressures the attorney into wiring the money to the client’s bank account. If the client agrees to take a check, the client needs it sent fast. The attorney sees that the deposit has posted to his trust account and presumes that the funds have cleared, so the attorney wires the money to the client’s bank account.
7. Bad news.
A few more days pass, or maybe even a couple of weeks go by, before the attorney gets some bad news: the check has bounced and the money has been debited back out of the lawyer’s trust account. In most cases, the check was a forgery.
At this point, the client has vanished. The account that the lawyer wired the money to has closed, or at least no longer has any funds in it. And the lawyer’s trust account is either overdrawn or at least substantially depleted of hundreds of thousands of dollars that the lawyer has to replace out of his own pocket.
By William Pfeifer
